RETIREES receiving the state pension get a pay rise every year thanks to the triple lock.
But how does it work and what does it mean for your pension?
What is the triple lock?
The triple lock is a calculation used to determine how much the state pension rises by each year.
It was introduced by the coalition government in 2010 and sees pension payments increase in line with whichever of the following is highest:
- Earnings – the average percentage growth in wages in Great Britain from May to July (released in September)
- Inflation – the rising cost of living in the UK, as measured by the Consumer Prices Index (released in October)
- 2.5%
It means pension payments will rise in 2024 by whichever is highest out of earnings, inflation or 2.5%.
The triple lock was temporarily halted in April 2022 for a “double lock” and the wage element was withdrawn.
This year the amount increased by the rate of inflation for last September, which stood at 10.1%.
It increased by £18.70 from £185.15 to £204 a week.
The new state pension is for those who build up National Insurance contributions (NICs) after April 2016.
At least ten years’ worth of NICs is needed to get the new state pension, while 35 years are needed to qualify for the full amount.
You need at least 30 qualifying national insurance years to get the basic state pension.
While the former, or basic state pension, went up by £14.35 from £141.85 per week to £156.20.
Is the triple lock being scrapped?
Former Prime Minister Liz Truss said that the triple lock will be protected.
And last November, Chancellor Jeremy Hunt confirmed that it would stay.
This means millions of pensioners will not be left worse off, receiving an £870 rise in state pension payments.
The announcement was welcomed by pensioners feeling the squeeze as the cost of living rises.
In the Autumn Statement on Wednesday, Mr Hunt confirmed the triple lock would indeed stay for another year.
It means payments will increase by 8.5% in April 2024.
Growth in employees’ average total pay was 8.5% in the three months to July, while the UK’s rate of inflation remained at 6.7% in September.
It means pensioners on the new state pension will be looking at as much as £901 a year.
This is up from just over £10,600 to £11,501 a year.
And a weekly rise from £203.85 to £221.20 – a £17.35 increase.
It’s important to note though that this is for those entitled to a “full” new state pension.
How much individuals get is based on the number of qualifying years they’ve accrued.
How much is the current state pension?
State pension payments were increased in April this year.
The full rate of the new state pension rose from £185.15 a week to £203.85 – in line with last September’s 10.1% inflation rate.
This equates to £10,608 in total over a year.
This is what the state pays those who reach state pension age after April 6, 2016.
The amount of new state pension you receive depends on your National Insurance (NI) record throughout your adult life.
If you have made at least 35 years of qualifying NI contributions, you may qualify for the maximum amount, outlined above.
The same is true if you have received equivalent credits on your NI record for raising children or providing care.
If you don’t have 35 years, you may be able to top up your record by paying in voluntary NI contributions.
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